Unemployment is the biggest concern amongst South Africa’s unskilled, poorly educated black workers. This study draws on research conducted at one of South Africa’s steel plants, referred to here as ‘Steelco’. The company, situated in Vanderbijlpark, south of Johannesburg, was chosen because, firstly, its retrenched workers often become unemployed and, this resulting in concerns about job creation for the unskilled workers. Secondly, in 1998, it developed the first ‘Employee Assistance Programme’ (EAP) in South Africa to assist its retrenchees in finding employment and starting businesses. Early studies of EAPs examined factors that caused a decrease in profit and productivity, i.e. drug addiction, marital problems and insecurity due to changing workplaces. Here EAP refers to voluntary assistance given to retrenchees by employers in the form of training, counselling and financial advice, aimed at helping them find employment or establish new businesses.
Economists argue that retrenchments in South Africa originated from apartheid labour practices, affecting a large number of unskilled and semi-skilled workers, and from global competition. Sociological studies on retrenchment have focused on its social impact on individuals, communities and cultures. This study examines the process of retrenchments and investigates why Steelco’s EAP goals were not achieved. The data were collected using in-depth interviews with 27 respondents drawn from managers, retrenchees and union officials, and by reviewing secondary literature. The key finding was that management had failed because training was offered after, not before, retrenchment, trade unions were not adequately consulted, training was outsourced to various institutions, and the unions responded to the EAP in an ambiguous manner. The study concludes that it is every employer’s responsibility to resolve South Africa’s structural problems. Employers must provide training like Steelco to recycle the knowledge and skills of retrenchees into the economy. They must learn from Steelco to reach agreement with unions, conduct needs assessments before implementing an EAP and consider poorly educated, unskilled workers.